Donor Retention Best Practices

The vast majority of non-profit organizations do not follow donor retention best practices. The Center on Nonprofits and Philanthropy reported in 2013 on the dismal donor retention statistics evidenced in a study of 1.8 million donors. The donor retention rate for first-time donors (i.e. getting a second gift) was an abysmal 27%. Repeat donors – those who had given at least two years in a row – were retained at a 70% rate.

Donor Retention Best Practices

Donor retention best practices often focus on “the ask” and look for ways to improve the next donation request. For example, properly structuring appeals to provide a donor with both an emotional basis and a psychological justification for giving again. However, very few consider basic human nature and therefore forget that’s its vitally important to stay at the forefront of the donor’s mindset. What really counts the most in retaining new donors? Timeliness and perception.

Fundraising expert Alan Sharpe explains how proper immediate followup and a timely second “ask” are the keys to getting that all important second donation, thus increasing your overall retention rate. While the article is about retaining donors obtained through fundraising appeal letters, the same principles apply to all donor retention strategies, regardless of how you obtained the first donation. Read more about improving donor renewal rates in the article below.

How To Get A Second Gift From A New Direct Mail Fundraising Letter Donor

If your charity is at all typical, you will lose 65% of the donors you acquire by direct mail in the first year alone.

In other words, only 35% of the donors you acquire through direct mail will give you a second gift. Most donors acquired through the mail are acquired at a net loss (you must spend money to acquire each donor), so you can see how important it is for you to do all that you can to encourage first-time donors to give again.

Here are the main reasons new donors do not give a second gift:

1. You acquire the wrong kind of donor

Donors acquired with premiums, trinkets and lotteries tend to fall away at a higher rate than donors acquired with a simple ask.

2. You ignore them

If you do not thank your new donors soon enough, or tell them what you are doing with their gift, or welcome them to your organization, they will not likely mail you a second gift.

3. You write them too often

If all you do with new donors is add them to your mailing list and then bombard them with an appeal letter each month, you will likely lose them.

4. You do not ask again soon enough

The key to securing a second gift is to ask early and ask often.

Your enemy is the calendar. For every week that elapses after you have received the donor’s first gift, and where you do not ask for a second gift, your chances of losing your newly acquired donor increase.

The worst thing you can do is delay four, five, six months or longer before going back to your new donor for a second gift.

By that time, many will have forgotten that they even made the first gift.

Four Donor Retention Best Practices

To increase your percentage of new donors who go on to give a second gift, do four things:

1. Thank them promptly, personally and particularly for their first gift.

2. Send them a welcome kit. Tell them why they are a valuable part of your organization. Include anything in the welcome kit (brochure, newsletter, welcome letter, FAQs, testimonials) that draws donors closer to your mission and the people you help.

3. Show them how you are using their gift to change the world. You can do this most effectively with a donor-centered newsletter filled with pictures and stories that show donor dollars at work.

4. Ask for a second gift within eight weeks of receiving the first gift. The single largest factor in determining if you receive a second gift is how long you wait before asking for it. The longer you wait, the less likely you are to secure that all-important second donation.

About The AuthorAlan Sharpe, CFRE, is a fundraising consultant, author, trainer and speaker. He serves as Senior Strategist at Harvey McKinnon Associates, the full-service fundraising agency specializing in direct mail and monthly giving for the nonprofit sector. Through his weekly newsletter, books, handbooks and workshops, Alan helps not-for-profit organizations worldwide to acquire more donors, raise more funds and build stronger relationships. Sign up for “Sharpe Tips,” Alan’s free, weekly, email newsletter, at www.raisersharpe.com.

More Donor Retention Strategies

The Nine Basic Truths Of Fund-Raising – You do not raise money by begging for it; you raise it by selling people on your organization. People do not just reach for their checkbooks and give money to an organization; they have to be asked to give. You don’t wait for the “right” moment to ask; you ask now.

Non-profit Organizations Fundraising Advice – Donors are your lifeline; create a foolproof mechanism to get friendly with those donors. Attach qualities of trust, integrity, honesty and truth to your fundraising campaign. State your goals and priorities, without ambiguity and confusion. Be clear in your projections, funding needs and delivery mechanism.

Donor Management Tips – We all know that people give money to people, not to organizations. That is why it is so important for nonprofits to target their potential large donors and figure out ways to draw them into the community that is the organization. Why Fundraising Is Really “Friendraising”.

How To Write A Lapsed Donor Letter – One of the hardest fundraising letters to write is a lapsed donor letter – an appeal letter aimed at winning back lapsed donors. Lapsed donors are too valuable to just let them slip away without trying to get them back.